Will the Green Sector See an UpSwing?

Will the Green Sector See an UpSwing? Updated: 4/19/2013

The Green Economy, broadly comprised of companies committed to renewable energy production, energy management, sustainable farming, resource harvesting and other segments, saw its last peak in price valuation at the end of 2007. This sector performance was extremely strong, showing outsized gains versus the broad market in the equity rally of 2005 to 2007.

While the market as a whole severely declined in 2007 and 2008, the Green indexes lost an even larger percentage of value than other sectors. Between June 2008 and June 2009 the NASDAQ U.S. Benchmark index (NQUSB) went down 27.43% while the NASDAQ Green Index (QGREEN) decreased 36.18%. NQUSB recovered and has gained nearly 75% since June 2009, while the Green index gained 46.83%. However, some sectors within the Green Economy continued to decline; the NASDAQ OMX Generation Index (GRNREG) lost an additional 41.88% after the broad equity market bottom in March 2009.

During that time, losses continued and outflows on green-related exchange-traded products (ETPs) increased, even as broad market equities were gaining significantly.

Just recently though a sliver of green has been seen in the index performance of the green sectors and it appears a bottom has finally been achieved. September 2012 marked the lowest point for the broad Green index and many of its sector indexes. Since that lowest level, the indexes have strongly rallied:

Many of the indexes within the broad green economy are now outperforming the broader U.S. market.

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